My most recent blog dealt with the inadequacies I see in the traditional marketing model that is still being taught in business schools everywhere. Specifically, I asserted that the classical four Ps – Product, Place, Price, Promotion – together with the more recently added Packaging, Positioning and People, can no longer be treated as independent variables in the burgeoning digital economy. The traditional marketing model is predictive and asks, “What will happen if…?” Marketing in the digital world is reactive and asks, “What is happening now?” To put it another way, the traditional model is about marketing to the masses; the new model needs to be about marketing to the individual. The first was born of the industrial age; the second is the child of the information age.

 

Shifting the Marketing Paradigm
In the pre-industrial world, every product was essentially a custom item, made by a local craftsperson to fit and suit the tastes of a specific customer. Mass production, on the other hand, required manufacturers to identify and gauge the needs and desires of the public; design, price and promote products to adequately accommodate them; and make them widely available. This ultimately created the disciplines of marketing.

The Internet, social media platforms, and the ubiquitous Bid Data have begun to turn back the clock, and will soon reshape our understanding of marketing and marketing research. We are experiencing a rapid increase in the ability to identify high-potential customers, tailor and deliver individualized promotional messages, and even tailor products or services to address their varying needs and tastes of each. The role of the marketer is evolving from information prospector to data miner. Instead of roaming the mass-market landscape searching out likely areas to mine, marketers now have a map to the mother lode and must focus on the most efficient means of extracting the ore.

 

An Evolving Role for Market Research
A little heavy-handed on the metaphor, perhaps, but it helps to illustrate the complementary changes that need to occur in the field of market research. As with marketing, the direction moves from predictive to reactive. Such things as focus groups and opinion surveys will still have a place in identifying broad societal needs that are worth addressing with relevant products and services. However, targeted research to test the relative value of product features, pricing models and promotional messaging will become less important as the necessity of predicting mass behaviors is replaced by the need to process what is happening in the marketplace and respond to it quickly and efficiently.

The old model used a small amount of information to project broad market dynamics; the new one uses an immense amount of data and seeks to winnow it down and isolate what each consumer in the market will do. The first is inductive by nature, while the second is deductive. A major difference between inductive and deductive reasoning is that the former intrinsically accepts that its results may be incorrect, while the latter must necessarily be correct if the information on which it is based is true. To remain relevant, it will be necessary for market research companies to develop tools that optimize the data mining process and the analysis of market dynamics in real time.

 

A Few New P-words to Consider
E-Commerce makes it increasingly difficult to treat product, price, place and promotion as independent variables rather than elements of an integrated whole that is in continual flux and driven by the dynamics of the marketplace. There are a few other P-words that I humbly suggest marketers need to concern themselves with in the future.

Personalization: How individualized can you make your product or service, and how effectively can you target your promotional messages to the needs of the individual based on their digital footprint?

Participation: What tools and techniques, social media or otherwise, can you employ to increase online engagement and build brand loyalty on the part of potential customers?

Process: What internal processes can you build to monitor, evaluate and respond rapidly to real-time market dynamics, and optimally manage your brand and your sales?

That last one is key, and it carries the concept of market strategy to a higher level. The companies that succeed in the e-Commerce arena will be those that best learn to manage the expanding wealth of information provided by Big Data, have the systems in place to respond quickly to change, and the flexibility to modify any and all aspects of their offering in pace with the market. Much like a general orchestrating a battlefield, the strategy included in the marketing plan is simply a starting point; maintaining fluid control of all resources and applying them when and where they are needed is essential to winning.